If Congress Must Regulate Sports Betting, It Should Focus On Enforcement

Written By Martin Derbyshire on January 4, 2019 - Last Updated on February 19, 2021

The American Gaming Association (AGA) is right to oppose the federal sports betting bill introduced by Sens. Orrin Hatch (R-UT) and Chuck Schumer (D-NY) about a week before Christmas.

It smells likes its just another attempt to force operators to use official league data and create some kind of a national sports wagering clearinghouse. If so, it’s simply a cash grab aimed at making sure pro sports leagues and the feds get a piece of the sports betting pie.

It also appears to be another attempt to expand federal involvement in the gaming industry. If so, it tramples all over state rights and is as unconstitutional as the Professional and Amateur Sports Protection Act (PASPA) struck down in May.

Unfortunately, all signs point to Congress moving forward regardless. If so, Congress needs to know there’s at least one section of any federal sports betting bill that needs to be given some real teeth.

The AGA claims federal regulation like the Sports Wagering Market Integrity Act of 2018 is not something it finds interesting. It believes state and tribal regulators are already effectively providing the oversight the industry needs.

However, AGA Senior Vice President of Public Affairs Sara Slane did applaud one aspect of the proposed bill:

“We appreciate the sponsors’ recognition that more must be done to curb illegal sports betting operations, which continue to pose the biggest impediment to the success of a legal market that will benefit and protect consumers, sports leagues and casino operators alike.”

Going after the illegal market

The AGA’s original argument for widespread legal sports betting surrounded the idea that illegal and offshore sports betting operations were taking in an estimated $150 billion in bets from US customers annually. Legal sports betting is supposed to legitimize a good chunk of that while making sure operators are regulated and consumers are protected.

However, individual states hardly have the resources to go after the unregulated side of the business, but they can foster the creation of legal sports betting markets to compete with them. However, they can’t shut down the illegal and offshore sports betting operations.

This is one area where the feds can help.

Sens. Hatch and Schumer have included a section of the bill entitled, Enhancing Enforcement Against Unlicensed, Offshore Sports Wagering Websites.

It proposes allowing the US attorney general to obtain cease-and-desist orders against unlicensed sports wagering websites accepting US customers.

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Giving federal sports betting legislation some teeth

However, as Academic John Holden suggests in his in-depth analysis of the bill on LegalSportsReport.com, the entire section is a mess, particularly in regards to how it attempts to rein in offshore betting.

Holden says it adds very little to the existing powers under the Wire Act to shut down offshore sportsbooks. He also says it fails to deal with how exactly enforcement of the law will work.

In the end, it only pays lip service to the idea of enhanced enforcement and it does very little of anything about it.

The feds hope to get the sports betting industry and states regulating it on board with federal oversight. This is where it needs to start.

Give the act some teeth. Enhance enforcement against unlicensed and offshore sports wagering websites, instead of just talking about it. Change the law to make it possible to prosecute illegal and offshore sportsbooks that accept customers from the US.

Think of it as tit for tat. The feds get the legal industry a bigger piece of the $150 billion illegal markets by shutting out illegal operators. Then, the industry will be more willing to accept the idea of increased federal oversight.

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Martin Derbyshire

Martin Derbyshire has more than ten years of experience reporting on the poker, online gambling, and land-based casino industries for a variety of publications including Bluff Magazine, PokerNews, and PokerListings. He has traveled extensively, attending tournaments and interviewing major players in the gambling world.

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